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LSDefine
Simple English definitions for legal terms
space arbitrage
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A quick definition of space arbitrage:
Space arbitrage is when someone buys and sells the same thing in different places at the same time to make a profit from the difference in price. It's like buying a toy for $5 at one store and selling it for $10 at another store. People can do this with things like stocks, money, and other things that can be bought and sold.
A more thorough explanation:
Definition: Space arbitrage is the simultaneous buying and selling of identical securities in different markets with the hope of making a profit from the price difference in those markets.
For example, if a stock is trading at a lower price on one stock exchange than on another, a trader could buy the stock on the lower-priced exchange and sell it on the higher-priced exchange, making a profit from the price difference. This is known as space arbitrage.
Another example of space arbitrage is buying and selling different currencies in different markets to take advantage of exchange rate and interest rate differentials between currencies without assuming foreign exchange risk.
Overall, space arbitrage involves taking advantage of price differences in different markets to make a profit.